MinterEllisonRuddWatts in the Market

Thought Leadership on procurement and risk allocation

The Construction division will be leading four Thought Leadership Sessions at MinterEllisonRuddWatts this year. The sessions will give an overview of issues in the construction industry and our take on the best approach going forward. The first of four sessions of the year will be held on 4 April and will cover procurement and risk allocation. We know that the problems are. What are the solutions?

Legal news

Court of Appeal on unit titles

The Court of Appeal in Body Corporate S73368 v Otway has ruled that s 138(4) of the Unit Titles Act 2010 (a provision which states that the owner of a principal unit is liable to pay for infrastructure elements if those elements are contained in the owner’s unit) does not apply to works which were required to maintain the overall weathertightness of the development.

This decision will have far reaching consequences for many bodies corporate. It may mean that any works to a unit which affect weathertightness of the development are for the benefit of all, and thus not claimable against the owner. Stay tuned next month for our expanded comment on this important decision.

Cladding and the Fair Trading Act

In Urlich v Far North District Council, Company found liable under section 9 of the Fair Trading Act for supplying a defective wall panel system and representing that it was a tested and approved material in New Zealand. Company ordered to pay approximately $500,000.

Market activity

Waimea dam construction ready to begin

Construction of the $105.9m Waimea dam, near Nelson, is ready to begin. The construction will take three-years and will relieve ongoing summer water shortages in the region. Waimea Water Ltd, a council-controlled organisation, will manage and oversee the construction by contractors Fulton Hogan and Taylors Contractors.

Some Christchurch building companies are slashing margins in an attempt to obtain work, despite the national shortage of builders. Demand for project builders and carpenters is down 14 percent and down 7 percent for building labourers. The reducing demand correlates with the completion of a lot of rebuild work.

Iwi plan to make Rangitoto more accessible and have put forward commercial plans for zipline and gondola rides on the iconic island. James Brown, chair of Ngāi Tai ki Tāmaki, said the rides would not be detrimental to Rangitoto because they would not be visible from the mainland, would skim the bush line and would provide a significant amenity for many more people to enjoy the motu.

Housing Minister, Phil Twyford, has said that “it’s going to be tough to meet” Kiwibuild’s first year target of building 1000 homes by July. After six months, only 33 homes have been built. Kiwibuild has also been suffering leadership troubles with its head, Stephen Barclay, resigning because of an employment dispute.

The Swedish furniture giant Ikea has confirmed that it is bringing the “full Ikea experience” to New Zealand. The Auckland megastore will open in a few years offering over 7000 products and a restaurant. In the meantime, a pop-up store will be opening in Auckland to give consumers “a taste of what’s to come”. An online store and a smaller South Island store are also planned.

$1.1 billion of shops, restaurants and bars gained building approval in the year ending November 2018, which was a 37% increase on the previous year. This increase was partly due to large consents for convention centres and shopping malls in Auckland and Christchurch. In total, there was a record $7 billion in non-residential building consents issued.

The contract for the next stage of the Eastern Busway has been signed with Fulton Hogan as the contractor. Construction will commence in April and is expected to take two-years. The project will involve the creation of a dedicated, congestion-free busway, the upgrading of multiple intersections, a flyover, new cycle and walking paths, a new bridge and improved public spaces.